Medicare Scare

For all their problems paying for Medicaid, state employee health benefits, SCHIP and retiree plans, the one source of soaring health costs states don't ...

For all their problems paying for Medicaid, state employee health benefits, SCHIP and retiree plans, the one source of soaring health costs states don't have to worry about is Medicare. The health plan for seniors is strictly a federal affair.

That, suggests Mike Leavitt, is a mistake. "States are at risk in this discussion. The constitutional role of states is at risk," said Leavitt, the former Health and Human Services secretary and governor of Utah.

Leavitt suggested to a panel at the National Governors Association meeting Sunday that reform of the entire health care system depended on changing Medicare. Medicare accounts for 15 percent of health spending but has an outsized influence, with all the players adapted around it, Leavitt said.

And if Medicare isn't changed, Leavitt said, "States will become branch offices of an insolvent partner."

Leavitt's presentation as part of a health panel triggered a discussion among governors about what they wanted to see from a national health bill -- in particular, the question of whether they would be willing to sacrifice control in terms of state regulation of insurance plans in exchange for coverage of more citizens.

Democratic Govs. Jennifer Granholm of Michigan and Ted Kulongoski of Oregon suggested they'd be willing to give up control in exchange for broader coverage. Republican Gov. Mike Rounds of South Dakota expressed reservation about surrendering control, pointing at the "pathetic" state of the federal-run Indian Health Service as a warning.

For all his dire talk -- and Leavitt opened his remarks with a long story suggesting that Argentina's fall from economic powerhouse a century ago to impoverished recent times was perhaps a parable warning of consequences of U.S. indebtedness -- Leavitt also paid tribute to the ingenuity of states.

"I am persuaded that if the national government were to state, here are some standards, you have four years to cover everyone, I do believe states could get this done."